Republicans, Democrats Gearing Up for Showdown on Tax Cuts

BY Terence Burlij  November 19, 2010 at 7:24 AM EST

Sen. Harry Reid, D-Nev.

“The main thing we’ve learned is that we’re united in recognizing that we have to protect the middle class,” Sen. Harry Reid, D-Nev., said Thursday after the Democrats’ caucus meeting. Photo by Bill Clark/Roll Call.

The Morning Line

Democratic leaders announced Thursday that they would vote to extend tax breaks for families making less than $250,000 a year but allow tax rates for wealthier Americans to rise at the end of the year, setting up a showdown with Republicans when Congress returns after the Thanksgiving recess.

House Majority Leader Steny Hoyer said Democrats are “firmly committed” to keeping tax cuts in place for middle-income families but argued the country “cannot afford” the $700 billion it would cost to leave the breaks for higher wage earners. In a statement released Thursday night, Hoyer said, “The House will vote on an extension of middle class tax cuts before they expire.”

Earlier Thursday, following hours of closed-door meetings with the Senate Democratic caucus, Majority Leader Harry Reid told reporters, “The main thing we’ve learned is that we’re united in recognizing that we have to protect the middle class.”

Senate Republican leader Mitch McConnell has offered a bill that would make the current tax rates permanent. On the Senate floor Thursday, he said, “[T]he most important thing we can do to create jobs between now and January 1st is to send a message to job creators that we aren’t going to raise their taxes.”

Reid said he would give Republicans an opportunity to vote on McConnell’s proposal, with one condition: “If he wants a vote on that, I’ll be happy to help arrange that. But, he should also help arrange a vote on [$250,000,] period.”

House Speaker-in-waiting John Boehner, meanwhile, sided with his Senate GOP colleague, saying, “I believe that we ought to extend all of the current tax rates for all Americans.”

As the Washington Post’s Lori Montgomery and Shailagh Murray report Friday, there’s not the same level of consensus among Democrats. They write that President Obama and party leaders in Congress “failed to agree on a strategy” for extending the Bush-era tax cuts during a meeting at the White House on Thursday.

With lawmakers gone next week for Thanksgiving, there isn’t likely to be much movement on the issue before the bipartisan meeting at the White House, which is now scheduled for Nov. 30.

STUCK IN NEUTRAL

Essentially nothing was done after the first week of the lame duck session of Congress, leaving lawmakers little time after Thanksgiving to agree to fund the government and to decide whether to extend all or part of the expiring Bush tax cuts (see above).

House Democrats on Thursday put up a vote to extend unemployment insurance for 90 days. The measure failed, thanks in part to Republicans and some Democrats voting against it. The most significant action on Capitol Hill this week has been on the House Ethics Committee, which decided to recommend censure for Democratic Rep. Charles Rangel for breaking House rules related to misuse of his office and for failing to report income or pay some taxes on a villa in the Dominican Republic.

Approval of the new nuclear arms treaty with Russia, which President Obama has called his top legislative priority, is also being blocked by Arizona Republican Sen. Jon Kyl. Congress also needs to figure out a temporary agreement to fund the federal government, but that hasn’t materialized either.

All this means legislators will have plenty besides tax cuts on their plate when they return after Thanksgiving.

NOT BACKING DOWN

Joe Miller, the Republican candidate in the Alaska Senate race, asked a federal judge Thursday to stop state officials from certifying the results of the election.

The move came a day after Sen. Lisa Murkowski claimed victory in the race, becoming the first write-in candidate to win a Senate seat since South Carolina’s Strom Thurmond in 1954.

Murkowski, an incumbent Republican who lost the party’s primary, holds a lead of nearly 10,400 votes. But Miller charged in an affidavit filed Thursday that his campaign was put at a disadvantage when the Division of Elections began counting write-in votes a week earlier than scheduled.

Miller says he was forced to “pull together volunteer observers at the last minute,” which did not give them adequate time for training. “As a result, an indeterminate number of ballots with candidates’ names misspelled were counted without being challenged during the first several days of counting,” Miller said in the documents.

Murkowski said, prior to the injunction development, that Miller should take a “very critical look at the numbers” before requesting a recount.

“I think it is time to look at the votes, look at the numbers, and accept that Alaskans have spoken,” Murkowski told the NewsHour’s Judy Woodruff on Thursday.